00:49

David Komjati: Thank you, Leigh. I have over 25 years of supply chain and logistics experience. I grew up in the pharmaceutical and medical device logistics space. It's been many years of trying to build critical solutions with innovative new tools, and of understanding how we get our medicines to patients at the right time, in the right condition, and at the right value. I'm here today at the HPCLC conference as a Board of Directors member. Our conference vision is to bring together people across the logistics, pharma, and healthcare supply chain industry to educate, build thought leadership as we move forward, look for new solutions, and hopefully have collaborative conversations that help shape the industry. I'm really happy to be here and to speak with you about this.

01:58

Leigh Mays: That's great, because it leads right into our first question of the day. What lessons did this industry learn during Covid, when flexibility and agility had to happen almost overnight? Those lessons can help support what's going on today, from the Black Swan events we're having, about one every two years, to the geopolitical events happening now. How would you say Covid helped make pharma more nimble and more resilient?

02:32

David Komjati: It's a great question. First and foremost, Covid taught us that end-to-end visibility is key, and that speed isn't necessarily the most important thing you need. Being able to understand where critical inventory is placed through our network, where we need to position it, and how we can work more broadly with our supply chain partners is a huge part of how we continue to drive efficient delivery of the products that save people's lives. We need to move quickly to integrate that, and I think that's been one of the biggest lessons learned. Covid was the initial shock the industry felt. The geopolitical events of today are persistent, like you said. It's not just one swan anymore. It's a flock of swans. When these events occur, we can flex the muscle we built during Covid. But we also need to understand that these events are far more persistent and multi-layered. Engaging quickly with regulators and with supply partners, as part of the solution, is how we keep responding to what is more pervasive across all these geopolitical events.

04:20

Leigh Mays: You have me thinking about how pharma has been evolving since Covid, because it changed how nimble and agile you have to be within the supply chain. Overnight things were shut down and people couldn't go in, but patients still needed their medications. With the data and the resilience you've built over the last couple of years, does it help you move product around the world when you suddenly have to pivot, can't drop into certain airports, or a cargo ship can't land? There's so much you have to do to get the flexibility to adjust. How does that data, or the muscle you started to flex during Covid, support you?

05:11

David Komjati: That's another big change in how we've integrated data to be more useful. Five years ago, these types of risks were certainly risks, but probably low probability and high impact. Today they're pervasive and multi-layered: air capacity impact, ocean choke points, freight costs affected by fuel, capacity constraints driving cost. Now we can monitor and have visibility all the way from end to end, from our raw material providers through semi-finished goods to finished goods in the market. We understand the cold chain handoffs between each of those nodes. Where is our product? Is it safe? Do we need to act on it? Do we have a condition that shows our shipments are in distress? That lets us be proactive versus reactive, and that's where the data is helping. We've implemented key monitoring technology throughout the supply chain, available to us in a cloud environment. It gives us access not in hours but in a minute, to understand what's happening in that moment and react. We go back to the planning community and share what we're seeing in real time, so they can make better decisions and act more strategically. That's where big data, and being able to integrate it, has helped. It's been a journey over the last several years, working with partners and making sure we get value on high-value, supply-critical, patient-critical shipments, where we prioritize and keep building that into our operating model.

07:28

Leigh Mays: That's impressive. The technology has evolved so much that we can see exactly where the product is, what temperature it is, and what's happening in that space. If you have to reroute because of geopolitical events, you can track it all the way through. The conversation we keep having is about the original house phone tethered to the wall versus the cell phone we live by today. That's what's happening in pharma: everybody is getting the cell phone, so you can pull in any information you want. I'm impressed by the conversation on resilience, and on the data that gives you that resilience.

08:23

David Komjati: I think back to Covid, and it also told us we need to build risk sensing into our supply chain. It taught us to start scenario planning, run tabletop exercises, and be ready to respond because we've practiced responding. We're putting playbooks in place, and those playbooks let us move more quickly. Having sensing capability up the supply chain, knowing where nodes could be impacted, whether by a fuel crisis or by petroleum affecting suppliers in India who produce rubber stoppers, means we can focus on it and react before there's a real supply issue. That allows the pivot to happen. Another thing that came to mind is that strategic inventory, using inventory as a buffer, is a critical lesson learned from all of the disruptions. It allows us to make better decisions, and we're going to keep leveraging it as these disruptions become the norm.

09:57

Leigh Mays: What I'm hearing is partnerships with your suppliers and with your own internal stakeholders, and how you build cold chain agility into your model and processes. How did you see the partners you work with adapt and change through the process?

10:21

David Komjati: First and foremost, you have to treat your vendors like partners. They have to be part of the process. They have real-time strategic insights. I always say boots on the ground. They're in the market, sensing what is occurring. They often know where critical capacity is and which cold chain corridors let us move product to and through. When issues occur, our partners become part of the control tower. They're not somebody we rely on only when a problem happens. They help us with planning, including the scenario planning I spoke about. They're an integral part of how we protect our product, and they need to be part of that.

11:19

Leigh Mays: I always see it as a true partnership, because they know their capabilities and where they play best, and the options you can flex to. In a geopolitical event you want to know where they've done this before. Can we adjust? Can we move this on short notice, or alternate where we drop product in? Do we truck it versus fly it, or move it to ocean? A lot of conversations start to happen within those partnerships that really speed up the decision.

11:46

David Komjati: If we take the current Middle East crisis and think of it as a general geopolitical disruption, you look at critical hub infrastructure and critical cold chain corridors. Moving from the West Coast of the US, you have LAX, and on the East Coast, JFK. You move over the pond to Western Europe, where there's plenty of infrastructure, through Amsterdam and Frankfurt. As you continue east, you start to see choke points occurring. Our partners, our 3PLs and packaging partners, all understand what's available to us through these corridors. It presents not just a visibility risk to how we use these hubs but a decision-making challenge. Pharma supply chain resilience is being tested. Airspace is being impacted. Freight rates are being impacted by fuel volatility. Ocean chokepoints are occurring, along with regulatory and customs challenges. All of these are hitting at once, combined with cold chain logistics. It's a bit of a perfect storm, and it's pressure testing how resilient pharma supply chains are, and how resilient our partners are in helping us find solutions when we have to pivot. It's the biggest challenge for us.

13:42

Leigh Mays: What you just described has no complexity whatsoever. None. I've been in pharma logistics for a short time, but I've been blown away by how well organized you are about when and how to pivot, and what else you need to do. But you don't plan for an airport shutting down overnight, or for loading a container on an ocean ship that then can't move. That's where the pivot occurs: how do we adjust? And as you mentioned with inventory, since you can't get it off the ocean, or it might be stuck at the airport for a while, you have to find other ways to keep the pharma moving. I wondered about your thoughts on how you do that, because you can't predict it. That's the challenging part.

14:56

David Komjati: This goes back to one of those key lessons: building in risk sensing, but also having playbooks. When a disruption occurs, you form tactical SWAT teams in real time. They look at what's happening and use all the digital data now available to make decisions faster. Having those teams available at a tactical level lets us think through how we manage stranded shipments in locations, and how our partners can help with rebookings and filings. Lane solutions can't rely on static routes. We need to be more dynamic. Inside this conversation, it pushes us immediately to what happens in two weeks, or four weeks. Where do we have inventory buffers? Where do we shift from thinking regionally to the product level, to the shipment level, in a risk-sensing environment, and how do we plan around that? This comes back to situational awareness, tactically moving through events, and getting visibility to what's coming. Then you take all that data and bring it forward to find where you need to pivot, move routes, rebook, or use different hubs. It also gives you an idea of where you need to think longer term about broader hub strategies, maybe postponement strategies. All these lessons are happening in real time, for a later conversation. But when it's happening, you have to have that muscle and those playbooks in place, and you need to execute.

16:46

Leigh Mays: That leads right into my next question. Based on what we've learned in the last five years, with so many Black Swan events between Covid and geopolitical activity, how do you see the next five years? What else should pharma think about or focus on for the future?

17:12

David Komjati: I see pharma supply chains continuing to be exposed to those core cold chain corridors and key infrastructure through the Middle East. I've seen different data representing 22% to 25% of international air freight moving through three key hubs: Abu Dhabi, Dubai, and Doha. Those are key transit points. Out of that 22%, it's about 20 million tons, and out of that 20 million tons, 300,000 tons is pharma and healthcare product moving through there. When we think about that infrastructure, the future becomes one of visibility. We need to keep investing in our risk resilience platforms. How do we see risk in motion, sense it in real time, and react? How do we get to proactive risk sensing and invest in the right applications? We need to tell our leadership that we also have to think through our core operating principles around supply chain management, and the data that sits within that ecosystem, so that when we need to see it, it's available. We can start to build the digital shipment, model it, and get into scenario planning. The other piece is governance. You need the playbooks built and ready to go. You need to think through where strategic inventory will play a critical role at the product level. You need a strong sense of where the patient will be impacted. We can't allow geopolitical events to dictate our ability to deliver to patients. It's our responsibility to keep building up the processes. So the future is continuing to build processes and scenario planning, investing in end-to-end visibility, and having senior-level discussions on inventory build. There's a cost to all of this, and there's a balance in that conversation for operating any company. Those are the things we'll keep doing over the next five years. As technology improves, we'll keep leveraging it.

20:11

Leigh Mays: I love that. What I'm hearing is that there needs to be cold chain agility: not being so dependent on the infrastructure, but figuring out different ways to deliver into the same regions. When an airport is shut down or an ocean freighter can't get in, it's almost like a hub-and-spoke conversation. We always prefer to go into the hub, but if we can't, how do we pivot, go into other areas, and still push it through? I just hear agility.

20:49

David Komjati: Agility is a good way to phrase it. Double-clicking on it, I talk about governance and playbooks, but inside of that is the connection between your quality teams and site manufacturing. What are they doing in the market? Do our playbooks include the ability to pivot our packaging, if we need to go from pallet-size thermal protection systems to smaller parcel-size shipments to support patient-critical supply? Have we validated it, and is it ready to go? And vice versa: are we thinking through where we might have to pivot away and look toward something else, because it's not as critical in our SKU-level data?

21:43

Leigh Mays: I must say, you talk about it in such a confident way. It sounds like you're actively exploring solutions, planning ahead, and being proactive. Is there anything right now that might prevent you from moving forward? Is there something where you think, if I only had this, it would change how I look at cold chain agility?

22:10

David Komjati: More broadly, over the last five or six years, what may have prevented us is the idea of investing in platforms that give us visibility into a risk that is maybe low probability, sometimes at a high investment. I think that's shifted. What will continue to prevent us from being more agile, when we think through a multi-hub scenario and de-risking, is that de-risking comes at a cost to the business. So it's about creating business cases that make sense from a cost of capital, sustainability, and risk tolerance perspective, based on how we see ourselves operating. That's a big conversation to have, and it takes senior leadership across the pharma and healthcare industry wanting to understand that this is something we need to do. Back to the start, this isn't a Black Swan event we live through once. These are happening constantly. They're chronic disruptions.

23:30

Leigh Mays: I can't help but think, as you talk about that, that we want visibility. We want a better understanding of our options, to give us that agility. But what does it look like when you think about how much data you have at your fingertips now? Can that data help you be more efficient, make better decisions, and potentially drive out cost while keeping flexibility? That's no small ask.

24:04

David Komjati: No, it's not. One of the things we need to do is leverage that data as part of a broader set of value propositions. There's a lot of opportunity in that data from day to day. As you build up your digital infrastructure and digital stack, connect your forwarders, your thermal protection systems, and your monitoring devices, and you're getting this mountain of data, how do we deliver it every day in a way that helps the business make decisions on basic questions: lead time, impact on key lanes, the risk of not achieving critical lead times? We have broader initiatives that aren't as disruptive but present equal challenges: how do we move from air to ocean, and how do we use data where we see higher volumes and choke points to have other conversations across supply chain and logistics? There are insights there, and the question is how to keep gleaning all of them. Inside this is also a data quality evolution, and that's another risk. We can be really good at doing a small portion really well, and investing a lot of time, energy, and effort into having that data pristine. As you scale to global networks and want global insights, that data sometimes requires a lot of additional maintenance and management. There are gaps you need to keep filling. So it's an evolution in how you use it and show its value more broadly.

26:08

Leigh Mays: This is a little off topic, but given the sophistication you've built into how you think about the business, and growing up in pharma logistics, did you think you'd ever have this much data at your fingertips?

26:34

David Komjati: Not this way. And it's funny: logistics has historically been the group that provides deep insights based on questionable data. We're always pulling data together so we can share key information with leaders to help build a strategic roadmap and [unclear] key volumes. It's always been that challenge, and historically it's always been the same equation: we need transportation data, order-level data down to the SKU level, and product health data. Thinking back 20 years in my career, IoT devices weren't discussed. This is evolving technology. So to answer your question, there is some shock that this level of data exists. We can intervene and see the temperature moving in the wrong direction as it moves physically through the transportation chain, and work with partners to make a difference in the outcome of that product. It has changed ways of working. Historically, if a shipment arrived with a temperature excursion, it had to go through a quality release process that could take several weeks, and quality was blind to it. Now they know it's coming with an event that occurred. Often they can go through their process with all this data and release the product, because the stability data is integrated. They can look at where the event happened and how long it lasted. It moves faster. So in some ways I'm shocked, and in some ways it's the same data I was always after anyway.

28:28

Leigh Mays: Isn't that interesting? I can't help but think, as I hear you talk about the data and the evolution of pharma, and how long you've participated in it, that when you're in it and it's changing, it feels slow. But when you pull back and look from a distance, you think, wow, how far we've come in a short amount of time.

28:52

David Komjati: It speaks to the evolution of technology and our ability to keep pace. The pharmaceutical industry, in that particular vertical, has lots of compliance and regulation, and has been used to moving at a particular pace. That isn't the technology pace available to us in other ways on the digital front. Layering in new technologies that evolve in six-month and 12-month increments, which you could potentially use for value, is part of that agility challenge. It's also part of the new business case modeling for value, and that needs to be part of the discussion.

29:46

Leigh Mays: How do I want to phrase this question? I think what you're saying is important, but I'm also trying to understand how this data, while it has made us more nimble and more agile, and we know we need more data or the evolution of the data to give more insight, doesn't bog us down because we have too much of it. When you can monitor everything at any point in time, 24 hours a day, that's almost too much data to wrap your head around. How do you think about capturing data, or are there specific pieces you want to focus on more than others?

30:41

David Komjati: This goes back to solutions at scale. We're really good at solutioning one lane, or these 30 lanes, and monitoring them against a set of KPIs and any deviation from that. But if we want to overlay that on a thousand-plus lanes and allow key business rules to govern our actions, the aperture gets wider. First and foremost it becomes a prioritization conversation. You need to understand what's supply critical, patient critical, and high value, because that points you to where to look first and where your data structure, digital platform, and strategy will deliver real value to you and to patients. Some prioritization needs to take place, because at scale things sometimes start to fray around the edges. As we move forward, the opportunity is to think through how we leverage new technologies. Is there a way to use AI to support some of the data processing? Is there more automation that keeps us at the tip of what's important, without creating too much noise? One of the biggest fears we had when we started thinking about showing a risk score for what we're moving through the network, which I called risk in motion, was that I don't want to send an alert if a cyclone is moving through the South Pacific and we have a container on an ocean vessel 1,000 km away. How do we create the right business rules to reduce false positives and false negatives coming through as alerts, which then generate work to be done and people having to respond in real time? There's an opportunity to keep rationalizing all this data with more sophisticated business rules, and to build that into the operating model, on the digital side anyway. At the end of the day, I've coined the phrase AI versus HI. Where does human interaction become more critical? If you can filter out the noise of all that data, and I think that's what you're hinting at, you get immediate agility in action. You can really take that and do something with it.

33:48

Leigh Mays: That was great, and that was exactly where I was going, because I love that conversation on human intervention. Just because you can collect the data doesn't mean you need the data. But data matters. Since you're a board member of HPCLC, a healthcare logistics conference, tell me how HPCLC has been focusing on adjusting and adapting in light of all the geopolitical events. I know we pivoted a little away from the data conversation, but I wanted to bring it back to our initial geopolitical conversation, and to understand how you, as thought leaders in the industry, are thinking about agility in cold chain during these events.

34:33

David Komjati: HPCLC and its group of professionals have hundreds of years of combined experience. They understand that global infrastructure, at a macro level, is a conversation we need to have. One thing we're able to do immediately is build out a global map of how freight is moving and where the chokepoints are, and then raise not just awareness but which solutions support moving through them. We have a group of shippers and manufacturers close to our 3PL partners, who are connected to the ocean carriers and air freight carriers. We have thermal protection system vendors and partners here who understand the extended capabilities of solutions, and digital vendors who understand how data can help. Our mission is to educate shippers and the community at large on how to move through disruptive events, and then talk through them. We also promote the particular challenges we have in healthcare logistics. Pharma in general is becoming more time sensitive and more temperature sensitive, and the infrastructure and cold chain corridors are becoming more constrained during these types of disruptive events. So we get to talk through strategic alignment: how do we pivot, and how do we make that visible? Then how do we take that back to our leaders, package it, and create a unified message on elevating the industry, taking all this feedback and making actual change occur? That might be direct charters we need to stand up, or broader conversations on where they go and whether we need different hubs in certain locations. We're here focused on Latin America, and we learned a lot today from the governor about what Puerto Rico means, not just for the island but for the United States as a manufacturer and producer, and how it's also a key potential hub for the rest of Latin America and, in particular, maybe some parts of Europe. These are the conversations that drive change and elevate the community.

37:37

Leigh Mays: Perfectly said. This is my second HPCLC conference, and I've learned so much each time. I love the variety of topics, because it helps me understand areas of logistics that I don't necessarily focus on. I appreciate all the effort you put in as board members to help support and drive the conversations within the industry.

38:01

David Komjati: Thank you. It's a passion project, but it gives us a lot of value: peer-to-peer connection, thought leaders, innovation ideas, and improving the industry as a whole.

38:18

Leigh Mays: It's great. Thank you. The passion definitely comes across, and with that we'll wrap it up. Thank you all so much. Thank you, Dave, for speaking today. As always, I learn each and every time I talk to you, and I get a better understanding of what we need to think about and the next steps within the industry. I look forward to our paths crossing in the future.